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Vadnais Heights sports center: New audit raises more questions

By Sarah Hornershorner@pioneerpress.com

Posted:
08/07/2012 12:01:00 AM CDT

Updated:
08/07/2012 11:11:35 PM CDT

The 2011 audit of the Vadnais Sports Center raises more red flags about the arena.

Nine findings from the audit outlined in a letter sent recently by public accounting firm Abdo Eick and Meyers to Vadnais Heights council members point to continued problems with financial oversight of the 200,000-square-foot complex. Identified problems include commingling of funds, poor tracking of advertising agreements and sloppy receipt procedures.

The Sports Facility Development and Management Group, owned by former Vadnais Heights council member Mark Bigelbach, manages the sports center.

This is the second troubling audit the sports center has received since opening in November 2010. Significant revenue shortfalls at the facility backfilled through city loans -- now totaling more than $800,000 -- have added to concerns about the arena's finances and the burden it could become on taxpayers.

The council will review the latest audit in its entirety at a 5:30 p.m. workshop meeting Aug. 15. At that time, city auditor Steve McDonald will explain the findings and what they mean for the arena and the city, Mayor Mark Johannsen said Tuesday, Aug. 7.

"At this point, we are waiting for advice from our auditor," Johannsen said. "Obviously, I want to get to the bottom of what is going on."

Reluctant to say more until meeting with the auditor, Johannsen did say it was his understanding that many of the problems flagged had already been fixed by city staff.

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"A lot of the issues that came up in the 2010 audit spilled over into (this one) because they didn't come to light until mid-2011," Johannsen said. "But a lot of those issues have been addressed."

Some of the problems arose out of confusion over who actually owned the arena, leading Bigelbach to temporarily use his personal account to handle the arena's finances. Now, all finances go through a city account.

A chief concern in the audit for council member Joe Murphy is the commingling of funds between Bigelbach's account and the city's.

"I am concerned that we are we are still owed money" by the management company, Murphy said.

He is pushing for the city to conduct a forensic audit of all finances at the sports center, which the city is expected to consider at a later date.

The city is also in the process of interviewing management companies to replace Bigelbach. A decision could be announced at the workshop meeting next week.

Bigelbach said he plans to attend the meeting and will bring documentation along that will challenge many of the audit's findings.

"This is a witch hunt because they're trying to hide other problems," Bigelbach said. "It's time to let all the information out."

Neither McDonald nor city Finance Director Bob Sundberg could be immediately reached for comment about the audit.

City Manager Gerry Urban said staff would not comment until the council workshop next week.